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CRA payroll deductions are the four amounts an employer holds back from every pay: income tax, CPP, CPP2 and EI. In 2026 CPP is 5.95% of pay above a $3,500 yearly exemption, and EI is 1.63% of pay up to $68,900. The employer then sends those amounts to the CRA, along with a matching share of its own.
What do CRA payroll deductions take from each pay?
Income tax varies with your pay and your claim amounts, so the CRA publishes tables for it. The other three are flat percentages with a yearly cap. Once you hit the cap, that line drops off your stub for the rest of the year, and your paycheque gets a little fatter.
| Deduction | 2026 rate | Applies to | Yearly maximum |
|---|---|---|---|
| CPP | 5.95% | pay from $3,500 to $74,600 | $4,230.45 |
| CPP2 | 4% | pay from $74,600 to $85,000 | $416.00 |
| EI outside Quebec | 1.63% | pay up to $68,900 | $1,123.07 |
The CRA’s own pages for CPP contribution rates, maximums and exemptions and EI premium rates and maximums list the same 2026 figures. Quebec runs its own pension plan and parental insurance, so it works differently. This page covers the rest of Canada.
What does the employer pay on top?
More than most people expect. The employer matches your CPP dollar for dollar. For EI it pays 1.4 times your premium. None of that comes off your pay, but it’s a real cost of having you on the payroll. It’s also why an owner who hires a first employee at $60,000 spends more than $60,000.
Here’s the arithmetic for a worker paid $3,000 every two weeks, early in the year before any cap is reached. The CPP exemption is $3,500 a year, or about $134.62 per pay over 26 pays, so CPP is ($3,000 minus $134.62) times 5.95%, which is $170.49. EI is $3,000 times 1.63%, or $48.90. The employer adds a matching $170.49 of CPP and 1.4 times the EI, which is $68.46. That’s another $238.95 on top of the $3,000, so one pay costs the business $3,238.95, before income tax is even considered. The payroll remittance calculator does this sum for your own numbers.
How does a worked pay stub look?
Take a BC employee paid $2,000 every two weeks. The payroll deductions calculator shows $163.23 of federal tax, $76.42 of BC tax, $110.99 of CPP and $32.60 of EI. That’s $383.24 in total, and $1,616.76 lands in the account.
The CPP number is easy to check by hand. The $3,500 exemption is spread over 26 pays, about $134.62 each, so you multiply the rest of the $2,000 by 5.95%. Try the same on your own stub if a figure looks off.
A stub can still differ from the calculator by a few dollars. Payroll software works out tax through the year in steps, and CPP and EI stop when you reach their limits. For the yearly view, the take-home pay calculator is the better tool.
If a line looks wrong, start with whoever runs payroll at work. A wrong claim amount on your TD1 form is a common reason income tax comes out too high or too low, and it’s a five-minute fix.
When does the employer have to send the money?
The size of the payroll sets the schedule. The CRA sorts employers by their average monthly withholding amount. A small employer with a clean record and under $3,000 a month can remit quarterly, on 15 April, 15 July, 15 October and 15 January. Most others are regular remitters (under $25,000 a month) and pay by the 15th of the following month. Bigger payrolls send money twice a month or more often, and that’s a chore worth handing to payroll software.
Generally, your remitter type is based on your average monthly withholding amount (AMWA) from 2 calendar years ago.
Types of remitters, Canada Revenue Agency, canada.ca
The CRA reviews the remitter type every November. Miss a due date and the penalty starts at 3% for one to three days late. It rises to 10% when the payment is more than seven days late, or when nothing is paid at all.
What mistakes do employers make?
Employers slip in a few places. They forget the employer share when they price a job. They pay a day or two late, assuming a small amount won’t matter, and it does. Some treat a contractor as an employee, or the reverse, without checking. If you can’t tell which one a worker is, the CRA runs a ruling service for exactly that.
The tools here don’t cover Quebec source deductions, workers’ compensation or other payroll levies. Taxable benefits, like a company car, change the base and aren’t modelled either.
Where the numbers come from
CPP, CPP2 and EI figures come from the Canada Revenue Agency‘s 2026 pages. Remitter types, due dates and penalty rates come from the CRA’s remitting guidance, checked on 30 September 2026. This is an independent guide, separate from any government body.
Frequently asked questions
What are CRA payroll deductions?
They're the income tax, CPP, CPP2 and EI amounts an employer takes from each pay and sends to the CRA.
How much CPP comes off my pay in 2026?
5.95% of pay above $3,500 a year, up to $4,230.45. Pay above $74,600 adds a 4% CPP2 charge, up to $416.
Does the employer pay CPP and EI too?
Yes. The employer matches your CPP and pays 1.4 times your EI premium, and none of that is taken from your pay.
When must an employer send payroll deductions?
Regular remitters pay by the 15th of the next month. Small employers with a clean record may remit quarterly.
What if the employer pays late?
The penalty is 3% for one to three days late and 10% after eight days, on amounts over $500.
All payroll and salary calculators
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